From ownership to networks: understanding the drivers of firm international expansion

We empirically disentangle the debate on the advantages and disadvantages of stateness in internationalization, i.e., whether state ownership helps or hinders firms’ global expansion. Through a comprehensive meta-analysis of 210 primary studies, we move beyond the limitations of single-sample and country-specific research and identify two main empirical realities. First, state ownership has a negative impact on internationalization, but only when the state is the majority owner; in contrast, minority state ownership has a positive impact on global expansion. Our findings suggest that the advantage of stateness in the form of preferential access to resources and strategic backing offsets the disadvantages of stateness in the form of bureaucratic inefficiencies and political interference when the state has limited ownership influence. Second, state-owned enterprises prefer joint ventures over wholly owned subsidiaries as entry mode, especially under majority state ownership. This suggests the use of local partners to compensate for the prevalence of a liability of stateness in host countries. Thus, our study not only empirically clarifies previous competing findings but also offers new theoretical solutions to the role of state ownership on internationalization, identifying how the advantages and disadvantages of stateness balance out across ownership levels.